Bitcoin ETFs have reached nearly $50 billion in assets under management and have led the cryptocurrency market through an exciting period of growth.
ETFs have been dominating the cryptocurrency market since 10 new (and 1 converted) Bitcoin spot ETFs received SEC approval. Vetle Lunde, Principal Analyst at K33 Research, said: Projected to X It is said that the “Newborn Nine” will soon overtake Grayscale Bitcoin Trust (GBTC) in Bitcoin holdings.
The simple explanation is that the “New Nine” refers to the 11 spot Bitcoin ETFs approved for trading, excluding GBTC, which already exists and has been converted into an ETF, and Hashdex, which has received application approval but is not currently issuing one. Spot Bitcoin ETF.
Launched in 2013, GBTC is Grayscale’s flagship Bitcoin fund, and before the SEC approved spot ETFs, it was one of the only ways to invest in BTC through traditional investment vehicles. This fund has been the world’s largest Bitcoin fund for several years.
The “Newborn 9” tipping this legacy fund shows a clear preference for traditional cryptocurrency investment options.
“For people exposed to Bitcoin, it was an absolute riot.” Tom McClean, Principal Researcher at Vega Protocol, said: decryption. “We are seeing some of the most exciting market activity ever, and millions of investors are reaping the rewards.”
The growing demand for BTC is contributing to the scarcity narrative that is currently growing within the cryptocurrency.
“Bitcoin is becoming increasingly scarce, with only 21 million BTC in existence. Unfortunately, some of these will be lost due to forgotten passwords or corrupted storage devices, which will continue to increase scarcity. .” David Kemmerer, Co-Founder and CEO of CoinLedger, said: “The upcoming halving will further drive this scarcity and reduce the rate at which new Bitcoins enter circulation.”
With this scarcity pressure on the cryptocurrency market, ETFs are seeing more traditional demand for BTC than ever before.
“(Bitcoin ETFs) make it easier for more capital to flow into the asset,” McClean said. “As more investors allocate funds to Bitcoin through ETFs, available supply on exchanges and distribution may decrease, potentially putting upward pressure on the price.”
But unfortunately, this is not without its drawbacks.
Many cryptocurrency maximalists will believe that investing in BTC through a centralized authority is not why Bitcoin was created in the first place.
“Bitcoin’s original vision of a peer-to-peer electronic cash system took a backseat to its new role as digital gold and inflation hedge,” McClean explained. “It has also shifted the focus away from the long-term benefits of decentralization. This trend is concerning for those who believe in a more open and accessible financial system.”
The nine new companies are challenging Grayscale’s long-standing dominance in the cryptocurrency fund market, which in some ways has reduced centralization. But it also had consequences 4% of total Bitcoin supply Packaged as ETF. That’s just 1% less than what Coinbase had last year.
“Having 4% of the Bitcoin supply locked up in an ETF is a notable amount, but I don’t think it’s necessarily unhealthy from a decentralization perspective.” “As long as individuals have the freedom to choose between self-custodianship and ETFs, and the majority of Bitcoin remains in the hands of individual holders, the decentralized nature of the network is preserved,” McClean said.
Edited by Stacy Elliott.
